Awesome, awesome week for the HLHB Trend-Catcher! Thanks to the trending EUR/USD, the system was able to bag a net total of 297 pips!

With the number of high profile economic events lined up last week, the pair exhibited a lot of volatility. I thought the HLHB Trend-Catcher would get faked out a lot, but thankfully, the pair made a lot of intraday trends. That, of course, was good for my system.

Here's a rundown of the trades it took:

Invalid signal since RSI was below the 50.0 level the candle prior.

Long at 1.2273. Closed at 1.2259 due to new crossover. -14 pips.

Invalid signal since RSI was already below 50.0 the candle prior.

Long at 1.2283. Closed at 1.2292 due to new crossover. +9 pips.

Short at 1.2292. Closed at 1.2318 due to new crossover. -26 pips.

Long at 1.2318. Closed at 1.2297 due to new crossover. -21 pips.

Short at 1.2297. Closed at 1.2262 due to new crossover. +35 pips.

Long at 1.2262. Closed at 1.2354 when 50-pip trailing stop was hit. +94 pips.

Short at 1.2213. Closed at 1.2184 when 50-pip trailing stop was hit. +29 pips.

Will you look at that?!? Sexy, ain't it? EUR/USD, after touching the 61.8% Fibonacci retracement level, formed two dojis. Right after that, a bearish candlestick formed, telling me that the pair could be headed down. To add to my downside bias, there also seems to be a bearish divergence going on as price has been making "lower highs" while the Stochastic has been "higher highs."

I believe that the fundamentals are also in my favor. Yesterday markets were once again reminded that the European debt crisis is still far from being over. The euro gave up ground to most of its counterparts following rumors that the ECB would hold off purchasing bonds until the German Constitutional Court approves the ESM. On top of that, S&P also lowered its credit rating outlook for Greece from stable to negative.

Sure, the shared currency sometimes rallies when risk appetite is up. But looking at the bigger picture, both fundamentally and technically, I think that markets are still bearish on the euro. That's just me though!

Because my technical and fundamental analysis have lined up, I've decided to sell at market. I'm ultimately aiming for 1.2100, but I'll be taking part of my position every now and then if the trade goes my way. As for my stop, I've placed it 100 pips away, just a couple of pips above the 61.8% Fib.

Remember the still-open trade that I cited in my last update? It closed with a 47-pip win at 1.2243 when the 50-pip trailing stop got hit.

The HLHB Trend-Catcher system's gains were only limited last week because there were no big trends that materialized on EUR/USD. But I'm still pretty happy with my system's performance because the RSI was able to filter a couple of fakeouts. Here's a quick rundown of the signals that materialized:

Invalid signal since RSI did not cross 50.0.

Long at 1.2392. Closed due to new crossover at 1.2388. -4 pips.

Invalid signal since RSI did not cross 50.0.

Invalid signal since RSI did not cross 50.0.

Short at 1.2390. Closed due to new crossover at 1.2424. -34 pips.

Long at 1.2425. Closed due to new crossover at 1.2398. -27 pips.

Short at 1.2398. Trailing stop hit at 1.2377. +21 pips.

Invalid signal since RSI was not above 50.0.

Short at 1.2351. Trailing stop hit at 1.2291. +60 pips.

Long at 1.2314. Closed due to new crossover at 1.2275. -39 pips.

Total (including the trade from the previous week): +24 pips

I'd be lying if I told you that I'm contented with how my HLHB Trend-Catcher is doing though. I mean I'm happy with it, but I think I can tweak it more to make it even better.

I'm thinking about removing the 50-pip trailing stop for weekend trades like what I did last week. I'll replace it with a regular 50-pip stop if the trade remains open over the weekend.

As I've said in my HLHB Q2 2012 review, all weekend trades that materialized during the quarter closed as winners. Also, the open trade that I pointed out in my last update could've hit my 200-pip profit target at 1.2396 had there been no trailing stop in place.

What do you think? Please lemme know what your thoughts are by voting in the poll! Thank you!

As for my EUR/USD trade, it's currently up 89 pips. That may seem a lot, but I also have a wide 100-pip stop.

This means that I need to let it ride the downtrend further so that my reward-to-risk ratio is more than 1:1. I am trading the daily time frame, which means I'll be holding on to the trade longer than usual.

There were a lot of fakeouts last week, but thankfully, the HLHB Trend-Catcher still ended up positive. The gain wasn't impressive though, as the system only bagged a grand total of 15 pips.

Here are the trades and their corresponding results:

Invalid signal since RSI was already below 50.0 before the downward crossover.

Another invalid signal since RSI was over 50.0 before the upward crossover.

Invalid signal since RSI was below 50.0 before the downward crossover.

Long at 1.2296. Closed when 50-pip trailing stop was hit at 1.2225. +71 pips.

Short at 1.2326. Closed due to new crossover at 1.2342. -16 pips.

Long at 1.2342. Closed when 50-pip trailing stop was hit at 1.2337. -5 pips.

Short at 1.2334. Closed due to new crossover at 1.2333. -1 pip.

Long at 1.2333. Closed due to new crossover at 1.2323. -10 pips.

Short at 1.2323. Closed due to new crossover at 1.2334. -11 pips.

Long at 1.2334. Closed due to new crossover at 1.2311. -23 pips.

Short at 1.2311. Closed due to new crossover at 1.2304. +7 pips.

Long at 1.2304. Closed due to new crossover at 1.2283. -21 pips.

Invalid signal since RSI was below 50.0 before the downward crossover.

Long at 1.2325. Closed due to new crossover at 1.2349. +24 pips.

Invalid signal since RSI was already above 50.0.

Another invalid signal since RSI did not cross the 50.0 level.

RSI was above 50.0 during the crossover. Invalid signal.

Total gain: +15 pips

As you can see, there were numerous fakeouts, especially during the middle of the week. What I've learned from the months I have been testing the system is that fakeouts are normal. Systems catch them from time to time, but you can't completely eliminate them. I'm just glad that the system had another positive week.

You could say it was a "so-so" week for the HLHB Trend-Catcher. It came out with a gain at the end of the week, but its win wasn't spectacular. Here's the list of trades that the system generated:

Invalid signal since RSI was above 50.0 before the crossover candle.

Invalid signal since RSI was below 50.0 before the crossover candle.

Long at 1.2507. Closed at 1.2556 due to new crossover. +49 pips.

Invalid signal since RSI was above 50.0.

Long at 1.2538. Closed at 1.2499 due to new crossover. -39 pips.

Short at 1.2499. Closed at 1.2516 due to new crossover. -17 pips.

Invalid long since RSI was below 50.0.

Invalid signal since RSI did not cross the 50.0 level from above.

Long at 1.2546. Closed at 1.2588. +42 pips.

Total Gain: +42 pips

Am I bummed out that my system hasn't been raking in a lot of pips? To an extent, yes, but I have to understand that it is the summer. During this time, the market tends to range, which means less trend plays and big moves.

I should even be happy now that my system ISN'T losing. Most trend-following systems normally experience huge drawdowns in times like this.

In my last trade idea, I incorporated the 100 SMA in my discretionary system. Taking a look at the indicator on the daily timeframe of EUR/USD, we see that resistance on the moving average held!

Going into the weekend, I had a bullish bias on the pair because I was anticipating Fed Reserve Chairman Ben Bernanke to confirm QE3. Reports say that the central bank head honcho did hint at further easing. However, EUR/USD didn't rally because of renewed concerns about Spain.

To be honest, I don't know if I should buy or sell the pair now. Nonetheless, I will still keep close tabs on it. I'll gauge what the more dominant theme (i.e., the prospect of QE3 vs. the possibility of a Spanish default) will be and make my decision based on market sentiment.

So, there you go! I hope y'all got in on the action on the charts last week.

Do you see that very clear uptrend in EUR/USD's hourly chart? I think going long ahead of the ECB interest rate decision might be a good idea so I bought the pair at market!

With price testing support, I think I better be quick and jump in before I get left behind. After all, the pair is also exhibiting a bullish divergence, as price has made a "higher low" but Stochastic formed a "lower low."

On the fundamental side of things, it seems that investors are anticipating a big move from the ECB. I'm anticipating this optimism to last in today's trading and provide the euro with support, enough for EUR/USD to rally to 1.2600.

I'll be honest and tell you that I have no idea what to expect when ECB President Draghi announces the central bank's monetary policy decision. With that said, I promise to close my trade ahead of the event. I don't want to get burned when volatility surges tomorrow!

But just in case we do see volatility pick up ahead of the rate decision, I placed my stop well below the most recent low at 1.2475. I think that would give my trade enough room to move.

I must admit that this trade gave me quite a scare at first. When I jumped in, price quickly pierced through the rising trend line, making me think that it was going to head down fast. I had half a mind to close already, but I ultimately decided to let the trade breathe.

As the London trading session rolled along, price slowly made its way higher.

According to many news reports, the pair rallied due to the market's positive outlook on the ECB Interest Rate Decision. I'm very happy that my fundamental and technical analysis on the pair was spot on.

I was also looking to go long at 20. But as I was drawing my pretty lines it started bouncing back. I then got in Long at 05. I closed off at around 65 as it starting getting choppy was worried it might fall again...Issues of having a full time job and trading.

Ah, 'tis a sad week for the HLHB Trend-Catcher 3.0. Even though the pair trended upwards, the extreme volatility during the middle of the week distorted the RSI, preventing the system to jump in on the trend. In addition, the volatility the pair experienced also kept my trades from staying long enough to profit!

But there is good news: the trade that was left open the week before ended up with a huge win. It closed at the first crossover of the week, which enabled it to bag 150 pips.

You can see clearly that EUR/USD mostly moved higher during the week. Unfortunately, the rally was also a bumpy one! The German Constitutional Court's ruling as well as the Fed's FOMC Statement caused the pair to spike a couple of times.

Here are the signals that the HLHB Trend-Catcher generated:

Invalid signal since RSI did not cross the 50.0 level.

Another invalid signal. The RSI was already above 50.0 when the upward crossover happened.

Sold at 1.2780. Closed due to new crossover at 1.2778. -2 pips.

Long at 1.2778. Closed due to new crossover at 1.2767. -11 pips.

Short at 1.2767. Closed due to new crossover at 1.2805. -38 pips.

Long at 1.2805. Closed when 50-pip trailing stop was hit at 1.2822. +17 pips.

Overall, including the week prior's trade, the system brought in a net total of 116 pips. Not bad!

As I for my discretionary system, I didn't get in on any action last week. I don't want to sit on the sidelines for long though, this is why I'll be keeping close tabs on USD/CHF in the coming days. Should a valid trade setup materialize, you can count on me to pull the trigger!

It looks like there's a bearish confluence on EUR/USD around a previous support area. So this week, I'll try to score a win by shorting the pair. Wish me luck, pretty please!

Connecting the pair's most recent highs, we actually see that a falling trend line has materialized. I used the Fibonacci tool and realized that the trend line actually coincides nicely with the 61.8% level and last week's low around 1.3020. Very tempting, eh?

Fundamentally, I think that there are also a lot of downside risks, especially when you take into account all the things that are going on in the euro zone at the moment.

For one, there has been no request for a bailout by Spain, and there's nothing to suggest that it's coming soon. This is very disappointing for market participants, which has led to a lot of "risk off" trades in the last few days.

Also note that yesterday's PMI readings mostly came in worse-than-expected. PMIs are used to see where the economy is headed, so when they are falling, it also means that the economy is contracting.

Given the technical setup and the current fundamental landscape I have decided to place a sell order on EUR/USD at 1.3020. Here are the complete details of my trade idea:

It looks like my HLHB Trend-Catcher 3.0 wasn't able to mimic its performance from the week before as it produced some negative pips. Here's a summary of all the signals generated as well as the corresponding results:

I decided to wait for EUR/USD to pullback to the 61.8% Fib level and test the falling trend line before jumping in on the downtrend. My strategy proved to be a good idea as price soon dropped and hit my first profit target at 1.2920.